Overdraft and Mortgage

ow100

Hi everyone, 

Me and my partner are looking to buy a house at the end of the year. 

My credit score was pretty poor and I’ve built it up to excellent over the past 4 months - his is also pretty good. 

I’m concerned of my use of overdraft and if this will affect our chances of passing mortgage checks. I’ve been in and out of an unarranged overdraft in previous months however am working on reducing this and am only in an arranged overdraft on 2 bank accounts.
I’ve not gone into an unarranged for 2 months. 

How likely is it to effect our financial check? 

My partner does not have any issues with an overdraft. 

Thank you in advance, 

   

MattMattMattUK

ow100 said:

Hi everyone, 

Me and my partner are looking to buy a house at the end of the year. 

My credit score was pretty poor and I’ve built it up to excellent over the past 4 months - his is also pretty good. 

Your credit score is made up, a marketing gimmick designed so that the CRAs can try and sell you financial products. No lender ever sees it ignore it.

ow100 said:

I’m concerned of my use of overdraft and if this will affect our chances of passing mortgage checks. I’ve been in and out of an unarranged overdraft in previous months however am working on reducing this and am only in an arranged overdraft on 2 bank accounts.
I’ve not gone into an unarranged for 2 months.    

Having gone into an unarranged overdraft within a year of applying for a mortgage (or any other lending) is going to have a huge impact on your ability to get a mortgage, it may well rule out mainstream lenders and will certainly make the rate you get higher. Realistically you want to be fully out of your overdraft for twelve months before applying.

ow100 said:

How likely is it to effect our financial check? 

My partner does not have any issues with an overdraft. 

Thank you in advance, 

It will have a big impact, which might range from a total no, to only being able to use sub-prime lenders, do a higher interest rate, bigger deposit requirements etc.

Do you have any others debts and does your partner have any other debts? How much deposit have you saved, how much were you looking to borrow and what are your incomes?

grumpy_codger

ow100 said:

Hi everyone, 

Me and my partner are looking to buy a house at the end of the year. 

... am only in an arranged overdraft on 2 bank accounts.
I’ve not gone into an unarranged for 2 months. 

   

Where's your deposit for house purchase? With big(gish) savings it's unforgivable to be even in a arranged overdraft.